A new year means new hope of making your budget goals stick and a chance to turn around debt that may have snuck up on you over the past 12 months. Most well-meaning consumers need more than just good will, however. These proven methods of tackling credit cards and personal loans can get your net worth headed in the right direction. (These five steps can help get you out of debt faster and easier than you'd ever imagined. See Debt Consolidation Made Easy.)

IN PICTURES: Digging Out Of Debt In 8 Steps

Be Accountable
It's amazing what people will buy when no one is looking. Having a financial accountability partner can be one of the most effective ways to rein in spending and be sensible about non-essential purchases. This person can be your spouse, a co-worker, a friend or even a professional financial expert, but the concept of sitting down once a week with them to review purchases that fall outside of budgetary guidelines is a good one. It only takes one or two times of having to explain that extra nine holes or a splurge on shoes to your accountability partner before the guilt (and a change in your decision-making habits) sets in.

Be Informed
The myriad of new credit card laws and a change in business practices since the recession are all great reasons to become reacquainted with the legalese of your current credit cards and personal loans. Have rates changed? Will you incur additional charges for letting them sit idle? What options do you have for repayment? These questions can be easily answered with a call to the customer service department of each credit account. Once you are certain of the fine print for your cards, it will be easier than ever to tackle them responsibly, paying down the most expensive debt first.

Be Diligent
If your budget is tight and the thought of paying anything more than the minimum monthly payment is a foreign one, it may not seem worth the extra effort to look at paying down debt early. With just an additional payment of $5 a month, however, it's possible to see your debt goals as achievable again. Since the latest in credit card legislation (more specifically, the CARD Act), consumers now have more access to information on how paying the minimum (or more) will affect overall interest paid. Use this knowledge to your advantage, and play around with the numbers until you see a formula that makes sense.

You'll also find that even small payments will be applied to those purchases with the highest interest rate first (as compared to pre-act practices of applying it to the lowest rates.) That $10 you threw away on a movie ticket last month may be better spent on knocking out that high-rate card a year earlier than planned.

IN PICTURES: Top 6 Mindless Money Wasters

Be Realistic
As consumers prepare for tax season, one common sentiment will often be heard: "I'll use that big tax refund to pay down my credit card debt."

While this is a noble way to apply tax refunds, it's more appropriate to consider how debt can be paid down gradually, as it is incurred, and without the help of windfall money. By developing a strategy for paying down debt in addition to refunds, bonuses or other cash that falls outside of your budgeted income, you'll be better prepared if the worst happens and you see no additional dollars this year.

Use the assistance of debt calculators to figure just how long it will take to get out of debt, and be conservative in your estimates. What matters is that you are paying it down, regularly - not that you get it all paid off in an incredible amount of time. "Slow and steady" really does win the race, in this case. (This year, find out how to stretch these dollars further to strengthen your future. Check out 5 Ways To Make A Tax Refund Work For You.)

The Bottom Line
Whether you're destroying debt as part of a lifelong battle or this is a new burden for you in 2011, there is a way to get out from underneath financial obligations that cut into your time, energy and income: repayment. Paying off debt is a long journey, but one that will leave your credit score high and your sense of self-worth intact. May the New Year bring ample opportunity to raise your net worth and put those high interest rates behind you!

For the latest financial news, see Water Cooler Finance: FBI Insider-Trading Bust.

Related Articles
  1. Credit & Loans

    A FICO-free Loan? See SoFi's Super Bowl Ad

    Non-bank lender SoFi will air its first TV ad during Super Bowl 50. Here's how it's challenging big banks by providing an alternative approach to loans.
  2. Term

    Who Benefits from Microfinance?

    Microfinance describes banking services provided to low-income people or groups. Specific services offered by microfinance institutions include microloans, micro-savings and micro-insurance products.
  3. Credit & Loans

    Understanding Loans

    A loan is the act of giving money, property or other material goods to another party with the expectation of being repaid.
  4. Credit & Loans

    How To Lend Money To Family And Not Regret It

    Denying a family member’s request for a loan is hard to do, and not too common.
  5. Credit & Loans

    4 Personal Loans Sources for Fair Credit

    Discover the best places to apply for an unsecured personal loan if you have only fair credit, including information on rates and fees.
  6. Credit & Loans

    How To Apply For a Personal Loan

    Learn about different avenues for applying for a personal loan, and learn valuable tips to help you get your personal loan application approved.
  7. Personal Finance

    Top 10 Investopedia Personal Finance Stories of 2015

    Every year is the year to start saving money, and 2015 was no different.
  8. Credit & Loans

    What Does a Lender Do?

    A lender provides funds to another with the expectation those funds will be repaid with interest.
  9. Credit & Loans

    All About Government Loans

    There are many reasons to seek a government loan rather than one from a private lender. Government loans typically have low interest rates and offer fixed or subsidized options, as well as deferred ...
  10. Home & Auto

    How Does A Reverse Mortgage Work?

    A homeowner who’s at least 62 years old can use a reverse mortgage to tap into her home’s equity for money. The house serves as the loan’s collateral. The loan is repaid when the homeowner dies, ...
RELATED FAQS
  1. Can personal loans be transferred to another person?

    Personal loans cannot be transferred to another person, because these loans are determined based on your unique credit score ... Read Full Answer >>
  2. Are personal loans considered income?

    Personal loans are not considered income for the borrower unless the loan is forgiven. In other words, you cannot be taxed ... Read Full Answer >>
  3. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  4. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  5. Are personal loans bad for your credit score?

    Taking out a personal loan is not bad for your credit score in and of itself. However, there are several factors that come ... Read Full Answer >>
  6. Can Sallie Mae loans be forgiven?

    Sallie Mae loans, similar to other private loans, cannot be forgiven. As of 2015, there is no option for private student ... Read Full Answer >>
Trading Center